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Share-Based Compensation
12 Months Ended
Dec. 31, 2017
Share-Based Compensation [Abstract]  
Share-Based Compensation
13.
Share-Based Compensation
 
We have several stockholder-approved stock incentive plans for our employees and directors.  During the year ended December 31, 2017, we had three types of share-based awards outstanding under these plans: stock options, restricted stock units, and market stock units. We believe that our share-based awards align the interests of our employees and directors with those of our stockholders.

We grant options under these plans at market value on the date of grant. The options generally vest over four years based on service conditions and expire ten years from the date of grant. Restricted stock units and restricted stock awards generally vest over three or four years. Market stock units granted during 2016 and 2015 have a multi-year performance period ending in 2019 and 2018, respectively, and will vest at the end of the three-year performance period based on total shareholder return.

We recognize share-based compensation expense for options, restricted stock units, and restricted stock awards on a straight-line basis over the vesting period.  We account for forfeitures as they occur. We recognize share-based compensation expense for the market stock units if the requisite service period is rendered, even if the market condition is never satisfied. All awards generally provide for accelerated vesting upon a change in control or normal or early retirement (as defined in the applicable stock incentive plan). At December 31, 2017, we had reserved approximately 1.2 million shares for future equity grants under our stock incentive plan.

Following are certain amounts recognized in the consolidated statements of operations for share-based compensation arrangements for the years ended December 31, 2017, 2016 and 2015. We did not capitalize any share-based compensation costs during these periods.

 
 
Year Ended
 
 
 
December 31,
 
 
December 31,
 
December 31,
 
(In millions)
 
2017
 
 
2016
 
2015 (2)
 
Total share-based compensation
 
$
6.7
 
 
$
17.5
 
 
$
10.5
 
Share-based compensation included in cost of services
 
 
2.2
 
 
 
1.2
 
 
 
0.9
 
Share-based compensation included in selling, general and administrative expenses
 
 
4.4
 
 
 
5.9
 
 
 
6.0
 
Share-based compensation included in restructuring and related charges
 
 
 0.1
 
 
 
 0.3
 
 
 
0.2
 
Share-based compensation included in discontinued operations(1)
  
 —
 
 
 
 10.1
 
 
 
3.4
 
Total income tax benefit recognized
 
 
2.6
 
 
 
2.9
 
 
 
2.8
 
 
(1)
Includes the acceleration of vesting in 2016 of all unvested stock options, market stock units and restricted stock units held by two former senior executives as of the Closing who had accepted employment with Sharecare. 
(2)
Includes the acceleration of vesting in May 2015 of all unexercisable stock options and unvested time-based restricted stock units held by our former president and chief executive officer at the time of the termination of his employment.
 
As of December 31, 2017, there was $7.6 million of total unrecognized compensation cost related to
 
nonvested share-based compensation arrangements granted under the stock incentive plans. That cost is expected to be recognized over a weighted average period of 1.3 years.

In connection with the sale of the TPHS business, we modified approximately 92,000 options, 396,000 restricted stock units, and 75,000 market stock units by accelerating the vesting dates to July 31, 2016 (the date on which the sale of the TPHS business was consummated) for approximately 100 employees of the TPHS business.  This resulted in share-based compensation expense of $7.4 million, all of which is included in discontinued operations for the year ended December 31, 2016.

Stock Options

We use a lattice-based binomial option valuation model ("lattice binomial model") to estimate the fair values of stock options. We base expected volatility on historical volatility due to the low volume of traded options on our stock. The expected term of options granted is derived from the output of the lattice binomial model and represents the period of time that options granted are expected to be outstanding.  We used historical data to estimate expected option exercise and post-vesting employment termination behavior within the lattice binomial model. No stock options were granted during the years ended December 31, 2017 or 2016.

A summary of option activity as of December 31, 2017 and the changes during the year then ended is presented below:

 
 
 
Options
 
Shares
(In thousands)
 
 
Weighted
Average Exercise
Price
Per Share
 
 
Weighted Average
Remaining
Contractual
Term
 
 
Aggregate Intrinsic Value (In thousands)
 
Outstanding at January 1, 2017
 
 
1,024
 
 
$
14.02
 
 
 
 
 
 
 
Granted
 
 
 
 
 
 
 
 
 
 
 
 
Exercised
 
 
(472
)
 
 
12.15
 
 
 
 
 
 
 
Forfeited
 
 
 
 
 
 
 
 
 
 
 
 
Expired
 
 
(45
)
 
 
45.36
 
 
 
 
 
 
 
Outstanding at December 31, 2017
 
 
507
 
 
$
12.98
 
 
 
4.3
 
 
$
11,942
 
Exercisable at December 31, 2017
 
 
486
 
 
$
12.82
 
 
 
4.2
 
 
$
11,528
 

The total intrinsic value, which represents the difference between the market price of the underlying common stock and the option's exercise price, of options exercised during the years ended December 31, 2017, 2016 and 2015 was $10.5 million, $10.2 million, and $5.3 million, respectively.

Cash received from option exercises under all share-based payment arrangements during 2017 was $5.7 million. The actual tax benefit realized during 2017 for the tax deductions from option exercise totaled $4.1 million.   We issue new shares of common stock upon exercise of stock options or vesting of restricted stock units and market stock units.

Nonvested Shares

The fair value of restricted stock and restricted stock units is determined based on the closing bid price of the Company's common stock on the grant date.  The weighted average grant-date fair value of restricted stock and restricted stock units granted during the years ended December 31, 2017, 2016, and 2015 was $32.06, $12.37, and $11.97, respectively. The fair value of market stock units is determined based on the closing bid price of the Company's common stock on the grant date, except that the Monte Carlo simulation valuation model is used to determine the fair value of market stock units with a market condition. The weighted average grant-date fair value of all market stock units granted during the years ended December 31, 2016 and 2015 was $10.67 and $6.53, respectively. No market stock units were granted during 2017.

The two tables below set forth a summary of our nonvested shares as of December 31, 2017 as well as activity during the year then ended. The total grant-date fair value of shares vested during the years ended December 31, 2017, 2016 and 2015 was $5.7 million, $13.9 million, and $5.2 million, respectively.

The following table shows a summary of our restricted stock and restricted stock units as of December 31, 2017, as well as activity during the year then ended:

 
 
Restricted Stock and
Restricted Stock Units
 
 
 
Shares
(In thousands)
 
 
Weighted-
Average
Grant Date
Fair Value
 
Nonvested at January 1, 2017
 
 
939
 
 
$
13.11
 
Granted
 
 
136
 
 
 
32.06
 
Vested
 
 
(432
)
 
 
13.10
 
Forfeited
 
 
(71
)
 
 
13.27
 
Nonvested at December 31, 2017
 
 
572
 
 
$
17.60
 

The following table shows a summary of our market stock units as of December 31, 2017, as well as activity during the year then ended:

 
 
 
 
Market Stock Units
 
 
 
 
 
Shares
(In thousands)
 
 
Weighted-
Average
Grant Date
Fair Value
 
Nonvested at January 1, 2017
 
 
 
 
406
 
 
$
8.75
 
Granted
 
 
 
 
 
 
 
 
Vested
 
 
 
 
(8
 
 
5.46
 
Forfeited
 
 
 
 
(25
 
 
5.95
 
Nonvested at December 31, 2017
 
 
 
 
373
 
 
$
9.01